A front page article in the Business Section of last Wednesday’s New York Times, grimly entitled “An Upturn in Housing May be Reversing,” pulls together recent and contradictory data from various sources, including Case-Shiller, Moody’s, and The National Association of Realtors.  The conclusions are sobering.

There is a growing consensus that the positive national sales data that we’ve seen over the last few months is faltering.  Much of the recent activity, for example, was stimulated by the anticipated expiration of the “First Time Home-buyer Tax Credit,” originally set to expire in November, and now extended through April of next year.  Essentially, this means we’ve “borrowed” from future sales.

Also, despite some positive economic news and decent sales volumes, there’s been little improvement in sales prices because inventory levels – read “foreclosed properties” – remain so high.   Mary Maitland, VP of the S & P Index that publishes the Case-Shiller Index foresees a “W” pattern for the housing market, with prices this winter testing the lows we saw earlier in the spring.  Am I allowed to say “I told you so?”

The NY Times article has a cool interactive chart for specific MSA areas including “San Francisco” — remember this covers 5 of the 9 Bay Area Counties.

On the anniversary of Lehman Brothers’ demise and the near-collapse of global markets, it seems appropriate to take a step back from our little corner of heaven for a wider view.

Given where we were a year ago, the world seems to have heaved a huge, if cautious, sigh of relief.  During the chill days of February, the stock market had lost more than half it’s value.  Now it’s down “only” 35%.

San Francisco home prices have also improved.  In January home prices were down 37% from their all-time highs. By July prices had recovered 11%. In August, however, prices fell back 2%.  That’s a pretty stiff drop. (Click the chart for a big version.)

A sign of things to come?  Who knows.  Everyone seems to have a different letter of the alphabet – or at least the nether end of it — to describe the shape the recovery will take.

Ben Bernanke’s is a long, flat “U”: he thinks we’re on the way, but it’s going to be slow going.

Liz Ann Sonders, Schwab’s chief forecaster and one credited with having seen the train-wreck coming, holds out the possibility of a “V”, in which the economy bounces back like a “coiled spring,” propelled by low inventories and a recovering housing market.  You can dismiss that view as self-serving, but I prefer to give her the benefit of the doubt, especially since she’s been right before. Though I’m not sure she’s right this time.

The one that worries me the most, though, is the “W” , otherwise known as the dead-cat bounce or “double-dip” to cat-lovers.  Nouriel Roubini, no slouch at forecasting himself, has recently said that there’s a “small probability but rising” that we’ll not only run out of steam but fall back again, victim to enormous deficits and the premature closing of global cash spigots, among a host of other ailments.  To that rosy picture, he adds the specter of stagflation, as unsustainable budget deficits lead ultimately to higher interest rates while the economy remains weak.  Perhaps that’s the “X” scenario.

As for San Francisco, the housing market certainly seems sunnier these days, with volume at decent levels.  But I wouldn’t be surprised to see it turning colder, along with the weather.

Here are some of the cheery highlights:

• One out of every seven apartments and houses in the US are vacant, a level not seen since the 1960’s. That’s about 19 million units
• Less than a third of those are actually for rent or for sale, meaning that many more could yet come onto the market.
• New contracts for previously owned homes fell at their fastest pace for two years.
• Some areas that have fallen fastest, like inland California, are seeing improved sales.
• Urban areas that have withstood the recession reasonably well, like San Francisco and New York, are “frozen.”

We pass Elk Grove on our way up to Tahoe.  Beautiful spot east of Sacramento.  You can buy a 3 BR house there for $193,000.  The same house sold for $336,000 four years ago.  The mortgage is a $100 less than it costs to rent a 2BR apartment.  It’s hard not to think of that as positive.  That is, unless you were the one who lost $143,000 in equity.

They’re predicting the housing market will get “worse” before it gets better.  Why “worse”?  Because a lot of people are going to feel — and be — a hell of a lot poorer than they used to.   And the people for whom an increase in housing affordability might make a difference are the ones who are getting hammered the worst.

Here’s a chart showing future’s contracts on home prices.  It shows prices deteriorating further this year, followed by a long, flat recovery starting some time in 2010.

Sounds like it’s going to be chilly spring.